‘Zero tariff on US imports may undermine Malaysian SMEs’

Small and Medium Enterprises Association president says country’s long-term interests must be taken into account 

PETALING JAYA, Malaysia (MNTV) – Zero-duty access for over 1,300 industrial products from the US could have a significant impact on local industries if not implemented cautiously, Utusan Malaysia reports. 

Small and Medium Enterprises Association (Samenta) president William Ng said he was not against trade liberalisation. However, he added, the country’s long-term interests must be taken into account when opening the domestic market to foreign products without duty.  

Ng said US products typically have advantages in terms of production scale, efficiency, and technological support and this could lead to unfair competition for local SMEs. 

“SMEs, particularly in the food, agriculture, and light industrial sectors, may be affected if existing protections are reduced too quickly. 

“We are concerned that this move could erode the competitiveness of local SMEs that are not yet ready to compete directly with large companies from the US.

“Trade liberalisation must be strategic and based on fair reciprocity, especially in the context of trade with developed countries like the US,” he said.

Malaysia has eliminated tariffs on 1,347 industrial products and 191 agricultural products as part of its trade liberalisation commitments with the US in exchange for the US’s move to reduce tariffs on Malaysian imports from 25% to 19%.

This brings the total number of US products receiving zero-duty access to Malaysia to 6,911. 

Ng said Malaysia must ensure that such agreements include proper safeguard mechanisms to allow local industries time to adapt.

He also called for support measures such as capacity-building programmes, transition periods, and industrial adjustment plans to be put in place to help SMEs remain competitive.